Ford CEO Alan Mulally pockets $34.5 million bonus

Ford CEO Alan Mulally is $34.5 million richer thanks to shares granted two years ago vesting this week.

The payout is sure to be a sore subject among some Ford factory workers, who cited Mulally's pay when they voted against contract changes last fall. Mulally made $26.5 million in 2010, making him the ninth-highest-paid CEO in the U.S. last year, according to Associated Press calculations. UAW President Bob King has called Mulally's pay "morally wrong."

But Ford says Mulally's pay is fair because it's tied to the shares' success.

"Our compensation philosophy is to align the interests of our leadership with those of our shareholders," Ford said in a statement. "Ford's stock was $1.96 a share at the time of the 2009 awards, and is over $12 a share today. That is a more than a 500% increase, which benefits all stakeholders in the Ford turnaround."

Mulally was given 4.8 million stock units for his performance in 2009, a pivotal year in Ford's turnaround when it posted its first annual profit since 2005. Ford withheld 1.9 million shares for taxes. The remaining 2.85 million units were converted to shares worth $34.5 million at today's closing stock price of $12.09.

The stock awards were disclosed today in a regulatory filing. Mulally's 2011 salary and other compensation will be released later this spring.

Mulally also received 1.2 million stock options that will fully vest in three years. Those options have a strike price of $12.49 per share. And he was granted 376,000 stock units for his 2011 performance that will convert to shares in 2014.

Mulally, 66, has been widely credited with turning Ford around since he was hired as CEO in 2006:

He made the critical decision to mortgage most of the company's assets -- including its Blue Oval logo -- for $23.5 billion to fund a turnaround. That decision helped Ford avoid taking government aid and filing for bankruptcy in 2009 as General Motors and Chrysler Group were forced to take.

Mulally also has streamlined global operations and introduced successful new models like the redesigned Explorer SUV and Fiesta subcompact.

In an interview last fall, Mulally defended his pay, saying it is entirely tied to the success of Ford: "The vast majority of my compensation is at risk, because the numbers that you see are only realizable if we profitably grow the corporation. And that's the way it should be."

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About Chris Woodyard

Chris Woodyard is an auto writer for USA TODAY who covers all aspects of motoring. He revels in the exhaust note of a Maserati and the sharp creases of a Cadillac CTS. Chris strives to live a Porsche life on a Scion budget. More about Chris